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Volume
Hospitals generally operate under very thin margins (0–3% range)1and so
constant growth in volume is critical in maintaining solvency. Thus, volume is the basic metric for hospitalist programs and strategies should be
based on ways to increase the number of medically necessary discharges.
Length of Stay
Hospitals are primarily paid by both government and commercial payers
on an inpatient prospective payment system, which means they receive a
lump-sum payment for each discharge, regardless of the specific resources
consumed by caring for the patient. In this DRG (Diagnosis-related Group)
system, therefore, the hospital gets paid the same when caring for a patient
admitted for pneumonia, for example, who is discharged in five days as for
one who stays for 14 days. This is the main reason why LOS is such an
important metric. Each DRG has an expected LOS, based upon the reason
for admission and the severity of illness during the hospitalization, and so
LOS is typically looked at as the ratio of actual or observed to expected
(A/E), with the goal being < 1.0.
Patient Protection and Affordable Care Act (PPACA)
A key piece of legislation impacting healthcare in the United States was
enacted in 2010. Half of the $1.2 trillion cost for the Patient Protection
and Affordable Care Act (PPACA) was projected to come from cuts in
Medicare and Medicaid, with roughly one-quarter of that ($157 billion)
coming from reduced payments to hospitals. Two important mechanisms to achieve this anticipated cost savings were through reduced payments for avoidable re-admissions and for hospital-acquired conditions.
Avoidable re-admissions
Avoidable re-admission rates in the US received national attention during
the debate preceding PPACA, helped by a published study analyzing 2004
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Medicare claims data which showed that 20% of Medicare fee-for-service
patients were re-admitted within 30 days of discharge, with an estimated
cost of $17.4 billion for unplanned readmissions.
2
The PPACA allows
Centers for Medicare and Medicare Services (CMS) to withhold from
1–3% of payments to hospitals with high readmission rates. Hospitalist
programs should monitor and implement components of proven strategies, such as Care Transitions Program, Projects RED or BOOST
3–5
to
reduce their readmission rates.
Hospital-acquired conditions
The PPACA also contains provisions to penalize hospitals with high rates
of hospital-acquired conditions, which include, among others, advanced
stage pressure ulcers, catheter-associated central line infections, and
Foley-catheter related urinary tract infections. Other chapters in this textbook address these conditions and present strategies for prevention.
Clinical Documentation
The revenue cycle for hospitals starts with the admission and is entirely
driven by the clinical documentation of the diagnoses and procedures treated
and performed (Table 1). Specificity and comprehensiveness are critical for
ensuring accurate coding, which then drives reimbursement and publiclyreported quality data (US News, HealthGrades, HospitalCompare). More so,
CMS is mandating a transition to the International Classification of Diseases,
10th Revision, Clinical Modification (ICD-10-CM) in October 2014, which
will require even greater diagnostic and procedural specificity to map to the
appropriate ICD-10 code.
MS-DRG
In the United States, CMS adopted a new DRG system in 2007, MS-DRG
(Medicare-Severity), which includes a triad for most DRGs based upon
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Metrics and Dashboards
a list of important secondary diagnoses, termed complications/comorbidities and major complications/co-morbidities (cc’s and mcc’s). A
relative weight is assigned to each DRG and is directly proportional to the
hospital’s payment through Medicare Part A (see Table 2). A patient
admitted for pneumonia complicated by hyponatremia as a secondary
diagnosis, for example, would group to DRG 194, while a co-morbid
stage 3 sacral pressure ulcer, present on admission, would group to DRG
193. Failing to correctly document the latter would result in a 50% lower
payment to the hospital. In addition, the case mix index (CMI) would be
50% lower (CMI being the average of the relative weights of a sample of
DRGs). Had the pressure ulcer developed during the admission, it would
not have been eligible as an mcc. If there wasn’t a 2nd mcc, then the DRG
would group to the lower-weighted DRGs.
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J.I. Farber
Table 2. Triad of Pneumonia Diagnosis Related Groups
MS-DRG Description Weight *Payment
193 Pneumonia with MCC 1.4378 $7189
194 Pneumonia with CC 0.9976 $4988
195 Pneumonia w/o CC/MCC 0.7095 $3548
* Assumes a base rate equal to the national average of approximately $5000.
Table 1. Clinical Documentation Pearls
Unable to Code Acceptable to Code
LUL infiltrate LUL pneumonia
Sputum culture positive for Klebsiella, will Klebsiella pneumonia
start antibiotics
Hgb 5.2; transfused Acute or chronic blood loss anemia
Emaciated; total protein/albumin low; nutrition Severe protein calorie malnutrition
supplements started
ABG 7.22/68/44; will treat accordingly Acute respiratory failure, acidosis
Will rehydrate patient Dehydration
BP 70/40 on dopamine for support Shock or septic shock
No overt CHF; will continue lasix and digoxin Chronic systolic cHF
Unable to void; cathed for 600 mL Acute urinary retention
↓K; give 3 runs of IV KCl Hypokalemia
APR-DRG
In addition to sometimes serving as cc’s and mcc’s in the MS-DRG algorithm, secondary diagnoses are important to document because they are
also used when data are “severity-adjusted.” Using APR-DRG (All Patient
Refined), patients are classified into one of four severity of illness (SOI)
scores (1– 4 corresponding to minor, moderate, major and extreme). This
SOI score is then used to calculate an expected mortality for a group of
hospital patients, which is used to calculate a mortality index
(actual/expected mortality), which is preferably < 1. In most US News and
World Report rankings of top US hospitals, for example, the mortality
index accounts for 1/3 of the score.
Satisfaction Surveys
Increasing attention is also being paid to customer service and perceived
quality. HCAHPS (Hospital Consumer Assessment of Healthcare Providers
and Systems) is a national survey in the US that asks Medicare patients
about their experiences during a recent hospital stay. The results are now
publicly-reported on its website www.hospitalcompare.hhs.gov, including
a question asking whether a patient’s doctor “always” communicated well.
Medical Necessity
Recovery Audit Contractor (RAC)
Commercial payers and government regulators are focusing more attention
than ever before on evaluating the medical necessity of delivered healthcare services, with the primary intent to avoid payments for medically
unnecessary services. Hospitals face the brunt of this scrutiny, with the
massive federal RAC (Recovery Audit Contractor) program incentivized to
recoup overpayments through a contingency fee contract. This means that
hospitalists must be careful to clearly document the clinical rationale for
the reason for admission and continued hospitalization. Short stays are a
major audit target, the argument being that the patient may have been able
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Metrics and Dashboards
to be safely cared for at a lower acuity level setting. For example, a patient
admitted for pneumonia who is treated with a dose of IV antibiotics and
discharged the following day to complete a course of oral antibiotics may
or may not have required hospitalization. Clinical documentation of the
various patient-specific risk factors, such as hypoxemia, co-morbid chronic
systolic heart failure, other chronic advanced stage medical conditions,
and/or a high pneumonia severity index (PSI) score is essential in order to
justify the appropriateness of the hospitalization.
Concurrent Review
Commercial insurance companies in the US typically require prompt notification of admission of their members and have a concurrent review
process where case managers provide information (based on what clinicians write) about the patient’s condition and need for hospitalization to
obtain authorization (i.e. “if what you say turns out to be so, we will
approve payment for the admission”). Sometimes, this requires the physician to participate in a telephonic peer-to-peer clinical review with the
commercial insurance medical director.
Retrospective Denial
Programs such as the RAC, and other audits (Office of the Inspector
General, Justice Department, and others) involve issuance of medical
necessity denials after discharge, requiring hospitals to go back and review
the medical record and determine whether or not to appeal the denial. If
appealed, the physician is often asked to participate in the process.
Dashboards
Doctors understand data and appreciate a healthy dose of competition.
The physician dashboard is a powerful tool that leverages these factors to
manage the program, drive improvements, and demonstrate effectiveness.
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J.I. Farber
Dashboard data can be tracked on a monthly basis, shared both individually and in aggregate, and may include:
• Productivity measures such as discharge volume and RVUs (relative
value units) based on level of professional billing.
• Efficiency measures such as observed/expected LOS and discharge
order time.
• Utilization measures such as medical necessity denial and one-day
stay rates and direct hospital costs.
• Satisfaction measures such as patient and referring clinician satisfac-
tion scores.
• Quality measures such as re-admission and mortality rates.
Hospitalists should work with hospital leadership to carefully select the
most appropriate measures and determine how data are defined, collected
and reported.
6
Aligning Interests
In addition to assuming leadership roles in care quality, hospitalist programs are in a unique position to leverage their growth and diverse skill
sets with hospital administration in a number of ways. For example, hospitalists can often best serve as the physician advisor in utilization management, a required role in Medicare’s conditions of participation,
ensuring the appropriate utilization of resources for Medicare patients.
A physician champion is also needed in hospitals’ clinical documentation improvement programs to ensure accurate and comprehensive documentation and coding. A physician advisor with experience and credibility
amongst the clinical staff is critical to the program’s success, which is typically accompanied by a sizable return on investment for the hospital.
A third key role often best filled by a hospitalist is that of the physician
champion for the Health Information Management (coding) department,
where a physician with a deep familiarity with hospital care assists with
insurance company and government DRG denials. Similar to medical
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Metrics and Dashboards
necessity denials described above, these denials involve the allegation of a
coding error, typically a diagnosis code that was included without supporting clinical documentation. By removing the code, the DRG is often
changed to a lower-weighted one. The physician champion can assist in
appealing these denials, educating coders about the clinical context of the
charts they are abstracting, and educating physicians about the relationship
between documentation, coding, billing, and publicly-reported quality data.
References
1. http://www.ama-assn.org/amednews/2009/09/07/bise0910.htm
Hospital profit margins improving. A study shows that fewer institu-
tions are in the red and that cash reserves are increasing. By Victoria
Stagg Elliott. AMD news staff. Posted Sept. 10, 2009.
2. Jencks SF, Williams MV, Coleman EA. (2009). Rehospitalizations
among Patients in the Medicare Fee-for-Service Program. N Engl J
Med 360(14): 1418–1428.
3. Care Transitions Program http://www.caretransitions.org. Eric A.
Coleman, MD, MPH. The Division of Health Care Policy and Research
13611 East Colfax Avenue, Suite 100 Aurora, CO 80045–5701.
4. Project RED (Re-Engineered Discharge) http://www.bu.edu/fammed/
projectred/index.html. Brian Jack, MD Principal Investigator Brian.
Jack@bmc.org
5. Project BOOST (Better Outcomes for Older adults through Safe
Transitions) http://www.hospitalmedicine.org/ResourceRoomRedesign/
RR_CareTransitions/CT_Home.cfm Mark V. Williams, MD, FHM
Principal Investigator Advisory Board Co-Chair Professor & Chief,
Division of Hospital Medicine Northwestern University Feinberg
School of Medicine Chicago, IL BOOST@hospitalmedicine.org
6. Measuring Hospitalist Performance: Metrics, Reports, and Dashboards.
Society of Hospital Medicine’s Benchmarks Committee White Paper.
http://www.hospitalmedicine.org
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Inpatient Documentation and Coding
Steve K. Sigworth*, and Ira M. Helenius*
Key Pearls
• Medical necessity should always drive documentation and coding.
• Coding and documentation rules are interpreted differently at differ-
ent institutions. When needed, an institution’s compliance office can
be contacted to determine institution-specific rules.
• A chief complaint is required at each coding level, and if it is missing;
the note will not meet the requirements of any level.
• Initial visits level 2 and 3 must have a complete history component,
which requires: 4+ HPI, 10+ ROS and 3 PFSH.
• No ROS is required for discharge day services or level 1 subsequent
visit; all others require a ROS.
Introduction
One difficult aspect of inpatient medicine is the practice of coding and
billing for the services provided. Unfortunately, the instructions for coding and billing set forth in the United States by the Center for Medicare
and Medicaid Services (CMS) are vague and unintuitive, leading to significant complexity associated with these codes. Furthermore, coding is
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*Mount Sinai School of Medicine, New York, NY.
14
Chapter
generally NOT taught during residency and must be learned quickly in the
first weeks of becoming an attending physician.
This brief chapter is designed to explain the basic concepts of documentation and coding utilizing regulations for coding promoted by CMS
in their 1995 and 1997 guidelines. Importantly, variations of interpretation
of these guidelines exist between hospitals, states and regions. It is important to become familiar with an organization’s compliance department and
review their interpretations of the guidelines. This will enable adherence
to their interpretation of the CMS rules and allow for correct documentation and coding.
Hospitalist Coding
Reimbursements for hospital services are divided into two categories. The
first is the “facility” fee. This is typically based on a Diagnosis-related
Group (DRG) payment, which is determined upon a review of the medical record and procedural services after discharge. The second is the
“professional” fee. This fee is for services rendered by the physician during hospitalization and is determined by reference to the physician’s
progress notes. These notes are assigned an Evaluation and Management
(E&M) code depending on the complexity of the service rendered.
CMS requires that “medical necessity” drive each E&M code. This
means that one should only perform and document in a note those services that are medically necessary for the patient. As the rules surrounding
documentation become more familiar, medical complexity will indeed be
the driver behind the determination of the correct code for professional
services.
There are three basic categories of E&M codes used during a hospitalization: Initial Visit Codes (99221, 99222, 99223); Subsequent Visit
Codes (99231, 99232, 99233); and Discharge Day Codes (99238,
99239). The exact code used for the former two are typically chosen
based on the complexity of the patient’s problem, while the discharge day
code is time-based.
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S. Sigworth, and I. M. Helenius
Documenting E&M Codes for Initial and Subsequent Visits
Medical documentation notes are made up of four components:
• Chief Complaint
• History
• Physical Exam
• Medical Decision Making
Chief Complaint
The Chief Complaint is typically the medical condition or symptoms that
necessitated the admission. Importantly, the chief complaint is required on
every note for which a bill is submitted.
History
The History component has three elements:
• History of Present Illness (HPI)
• Review of Systems (ROS)
• Past Family, Social History (PFSH)
The HPI contains the descriptors that pertain to the context of the Chief
Complaint. Examples include timing, location, duration, quality, context,
severity, modifying factors and associated signs and symptoms. To meet
the requirement for any Initial Visit Code, at least four of these descriptors must be documented.
The ROS is a query of signs/symptoms of 14 recognized body systems. The highest level ROS requires documentation of at least 10 of these
systems. The systems include:
• Constitution (fever/weight loss)
• Eyes
• Ears, Nose, Mouth, Throat
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Inpatient Documentation and Coding